US government made at least $100 bn in improper payments last year

The US government estimates that it made about $100 billion in improper payments last year to those not entitled to receive them. The Medicare program only accounted for about half of the amount that was erroneously doled out.

Congressional investigators believe the number of inaccurate
payments could be even higher. The House Oversight Subcommittee
on Government Operations is scheduled to hold a hearing on
Wednesday afternoon regarding the improprieties.

"Nobody knows exactly how much taxpayer money is wasted
through improper payments, but the federal government's own
astounding estimate is more than half a trillion dollars over the
past five years," said Rep. John Mica, chair of the
subcommittee. "The fact is, improper payments are
staggeringly high in programs designed to help those most in need
— children, seniors and low-income families."

The total of inappropriate awards is down from a peak in 2010 of
$121 billion.

Federal agencies are required to provide annual estimates on
improper payments they offer, including overpayments,
underpayments, payments to the wrong recipient, and payments made
with incorrect documentation.

Improper government payments are often the result of clerical
errors or mistakes in awarding benefits without proper
verification, though some are the result of fraud.

In 2013, federal agencies made $97 billion in overpayments,
according to government estimates. Agencies retrieved over $22
billion in overpayments last year.

Underpayments in 2013 came out to about $9 billion.

The Obama administration has worked to lower the amount of
improper payments in recent years, according to Beth Cobert,
deputy director of the White House budget office.

"We have strengthened accountability and transparency, saving
the American people money while improving the fiscal
responsibility of federal programs," Cobert said in a
prepared statement for Wednesday's hearing, according to AP.
"We are pleased with this progress, but know that we have
more work to do in this area."

Yet a new report by the Government Accountability Office (GAO),
the investigative body of Congress, questions the accuracy of
agency tallies.

"The federal government is unable to determine the full
extent to which improper payments occur and reasonably assure
that appropriate actions are taken to reduce them," Beryl H.
Davis, the GAO’s director of financial management, said in
prepared testimony for Wednesday's hearing.

Some agencies don’t have accurate estimates for programs prone to
improprieties, Davis said, based on complicated accounting
requirements and federal-state partnerships in allocating
payments. For instance, the US Health and Human Services
Department reported that it cannot force states to offer
estimates for the Temporary Assistance for Needy Families
program, which is administered by each state individually.

Medicare health insurance programs for the elderly made up around
$50 billion in improper payments in the 2013 budget year, far
more than any other government program.

Most Medicare payments figured to be inaccurate were offered
without proper documentation, according to Shantanu Agrawal,
deputy administrator for the Centers for Medicare & Medicaid
Services. At times, the documentation did not verify that
services were even medically necessary.

"Payments deemed 'improper' under these circumstances tend to
be the result of documentation and coding errors made by the
provider as opposed to payments made for inappropriate
claims," Agrawal said in prepared testimony for Wednesday's
hearing.

The earned income tax credit, which provides tax refunds to the
working poor, was responsible for $14.5 billion in improper
payments. That total is 24 percent of all payments in the
program.

Medicaid, a federal and state partnership that offers health care
for the poorest Americans, was responsible for $14.4 billion in
erroneous payments, down from $23 billion in 2010.